Listed property sectors open up

Rationalisation in the listed property trust market will not stop new players coming into the market, according to Rothschild Australia.

Rationalisation in the listed property trust market will not stop new players coming into the market, according to Rothschild Australia.

Rothschild’s associate director of listed securities, Carlos Cocaro, says that while investors harbour the notion that “big is good” when it comes to listed property trusts, rationalisation will not dominate the sector for long.

“Even though there have been trends towards concentration, new managers will pop up,” he says.

Cocaro says the listed property market is becoming more diversified, with new segments opening up. He highlights the Village Entertainment Trust, managed by Challenger, as a prime example of this.

Cocaro says the Australian listed property trust market will take its lead from the US, where new sub-sectors such as healthcare, self storage, golf courses and trailer parks have been emerging in recent years.

While there has been such solid growth in the market, investors should be wary when investing in listed property trusts that are on continual capital raising drives, he says.

“Some of the smaller managers, eager to grow, are constantly raising capital. This may lead to below average performance in a listed property trust,” Cocaro says.